The physiological function and mode of regulation of transglutaminases are being studied as to their role in the formation of a "temporary tissue matrix" (fibrin or fibrin-connective tissue) during tissue or bone fracture repair and in the modulation of specific cellular processes. The physiological significance and biochemical mechanisms of factor XIIIa- and tissue- transglutaminase catalyzed cross-linking of plasmin inhibitor (Alpha 2-PI) to fibrin and other matrix proteins are under investigation. The cross-linking of (Alpha 2-PI) to fibrin plays a major role in stabilization of the "temporary tissue matrix" which is vital for the initial phase of cell migration and proliferation at wound sites. A number of factors in the plasma and tissue fluid can affect the fibric stabilization, i.e., oxygen metabolites, sulfhydryls, and neural proteases. We find that albumin plays an important role in the modulation of both fibrin-gel formation and catalytic activity of factor XIIIa as a co-factor and also provides -SH groups that are required. Oxygen metabolites derived from either external sources or from inflammatory cell exudates are found to inhibit both factor XIIIa and cellular transglutaminases. Sulfhydryl groups (-SH), on the other hand, induce activation of tissue matrix-associated transglutaminase in the lung. The cross-linked fibrin clot was found to be stable toward leucocyte proteases.